Ukrtelecom proposes 3G joint venture with Vodafone

22 May 2007

Ukrtelecom is considering a proposal to establish a joint venture with the UK’s Vodafone Group to develop 3G mobile services, reports local online paper The two companies are reportedly holding negotiations on the possibility of cooperation in the 3G sector. Incumbent fixed line operator Ukrtelecom is Ukraine’s only holder of a 3G mobile licence and is preparing to launch mobile services this year ahead of its planned partial privatisation, but it lacks expertise in the field. Industry experts quoted by the online report observed that a possible outcome of successful negotiations could involve transferring part of the corporate rights of Ukrtelecom’s Utel subsidiary that is developing the company’s 3G network, to Vodafone. Observers also noted that the Ukrainian mobile sector is already very competitive and that taking a stake in Ukrtelecom, or forming a 3G joint venture with the state-run company, represents the only way for Vodafone to gain entry to the market, where it would also enjoy the status of a 3G monopoly.